Author: Donwald Pressly
Date Published: 29 August 2012
BK One is poised to acquire a majority stake in various Basileus Capital businesses including a cash management services firm, prospecting rights, oil and agri-technology operations.
In an announcement yesterday, BK One announced its proposed acquisition of Basileus Capital’s interests “in select assets and renewal of a cautionary announcement”. This follows an announcement two weeks ago by Basileus Capital that it had initiated business rescue proceedings, following the killing of chief executive and co-founder Julian Williams allegedly by his former business partner Herman Pretorius on July 26. Pretorius turned the gun on himself afterwards.
Moneyweb reported that Basileus Capital was seeking to have its assets listed on the JSE through BK One. Private equity provider BK One’s preference shares are listed on the JSE but its ordinary shares are not. It is not clear whether the proposed transaction would be funded with ordinary shares or preference shares.
In terms of the rescue process, a majority of the affected creditors must approve the rescue plans.
BK One was launched by Basileus Capital and Kwanda Capital Investments. It raised R200 million in an initial public offering on the JSE after offering 20 million preference shares at R10 a share in December last year.
Three weeks after its chief executive’s death, Basileus Capital, which employs about 50 people, announced on its website that following “the tragic loss of Julian Williams… the board… has initiated business rescue proceedings”. “This measure was taken in order to protect all existing stakeholders, in particular the group’s current creditors, investors and staff.”
BK One reported yesterday that it would acquire “the target assets” from Basileus Capital subject to a number of conditions and the purchase consideration “will equal 90 percent of the value of the target assets”, as determined by the business rescue practitioners and confirmed by an independent valuer appointed by BK One.
There are seven target assets, three of which BK One already has an interest in.
n BK One currently has a 7.7 percent interest in Pure Ocean Aquaculture, a fish-farming firm. It seeks a further 86.3 percent interest, which is held by Basileus.
n Basileus Capital intends disposing of its 76 percent interest in physical cash management services firm Cash Connect to BK One.
n BK One seeks to acquire Basileus Capital’s 77 percent interest in Kawuleza Connect, which offers internet access services to customers throughout South Africa.
n BK One seeks to acquire Basileus Capital’s 98 percent interest in Lefatse Minerals, which is involved in the exploration and development of heavy minerals. It has prospecting rights over a deposit on the West Coast.
n BK One seeks to acquire Basileus Capital’s 94 percent interest in Burgan Oil Services, which is looking to develop fuel infrastructure facilities.
n BK One seeks Basileus Capital’s 100 percent interest in Tor Oil Infrastructure Construction, a new oil infrastructure development specialist.
n BK One will acquire Basileus Capital’s 82 percent interest in Agri-Technologies and Services, which provides technology solutions to the agricultural sector.
BK One noted that depending on the settlement mechanisms of the proposed acquisition – BK One ordinary or preference shares – the company “may be required to restructure its share capital”. This would require shareholder and JSE approval.
BK One executive director Dean Richards could not be drawn on a transaction price, but this would be determined by business rescue practitioner Alan Rennier of Ren Trust and independent valuers.
It is understood that existing Basileus staff will be absorbed and new staff will also be appointed.